CALGARY, March 16, 2012 /CNW/ - Invicta Energy Corp. ("Invicta" or the "Company") (TSXV: VCA) is pleased to report its financial and operating results for year ended December 31, 2011. Invicta's audited financial statements and related management's discussion and analysis for three months and year ended December 31, 2011 have been filed and are available on the SEDAR website at www.sedar.com and may also be obtained on Invicta's website at www.invictaenergy.ca.
During 2011 Invicta established Kindersley, Saskatchewan as a core oil producing area providing Invicta with a base for sustainable growth. Invicta has a drilling inventory at Kindersley of 194 gross (104 net) unrisked Kindersley locations. The Company expects to finance the development of this area through funds flow and its credit facility. Other 2011 financial and operating highlights are as follows:
- Drilled 10 gross (5.5 net) Viking horizontal oil wells at Kindersley resulting in a 284% increase in average production volumes from 2010.
- Increased proved plus probable ("2P") reserves 485% to 2,545 mboe as per the December 31, 2011 independent reserve report prepared by Fekete Engineering Assoc.
- Generated funds flow from operations in the third quarter of 2011 resulting in $817,696 ($0.01/share) reported for the fourth quarter and $903,091 ($0.02/share) for the year.
- Achieved operating netbacks of $58.16/boe in the fourth quarter and $48.75/boe for the year.
- Achieved 2P finding costs of $19.64 and a recycle ratio of 2.61.1
- Increased net undeveloped land acreage 63% to 41,900 net acres.
- Raised $7.1 million of net proceeds on the issuance of 39.8 million common shares.
- Established a credit facility with ATB Financial which was initially $3 million and was raised to $6 million in the third quarter. Subsequent to year end the credit facility was raised to $8.5 million and further increases are expected with the annual review of the reserve report.
|Three Months Ended||Period Ended|
|December 31,||December 31|
|Oil wells (net)||2.0(1.1)||1.0(0.6)||11.0(6.7)||4.0(3.6)|
|Proved plus probable reserves (mboe)||2,545||435||2,545||435|
|Undeveloped land holdings (net acres)||41,900||25,736||41,900||25,736|
|Average daily production|
|Crude oil (bbls/d)||174||45||100||11|
|Natural gas (mcf/d)||359||93||268||24|
|Total equivalent (boe/d)||234||61||145||15|
|Average product prices|
|Crude oil (Cdn $/bbl)||$ 93.40||$ 79.51||$ 91.31||$ 79.51|
|Natural gas (Cdn $/mcf)||$ 2.94||$ 3.66||$ 3.46||$ 3.66|
|Total equivalent (Cdn $/boe)||$ 73.99||$ 64.81||$ 69.52||$ 64.81|
|Royalties (Cdn $/boe)||$ 4.05||$ 6.50||$ 5.36||$ 6.50|
|Production & operating costs (Cdn $/boe)||$ 11.78||$ 13.30||$ 15.41||$ 13.30|
|Operating netback(1) (Cdn $/boe)||$ 58.16||$ 45.01||$ 48.75||$ 45.01|
|Petroleum & natural gas revenue||$ 1,492370||$ 331,741||$ 3,673,844||$ 363,181|
|Funds flow from operations(1)||$ 817,696||$ (197,880)||$ 903,091||$ (458,019)|
|Per share - basic & diluted||$ 0.01||$ (0.01)||$ 0.02||$ (0.04)|
|Earnings (loss)||$ 95,082||$ (882,561)||$ (634,675)||$ (1,243,582)|
|Per share - basic & diluted||$ (0.00)||$ (0.04)||$ (0.01)||$ (0.12)|
|Capital expenditures||$ 4,221,591||$ 2,114,505||$ 11,228,542||$ 4,650,095|
|Net debt(1)||$ 3,104,894||$ (73,494)||$ 3,104,894||$ (73,494)|
|Shares outstanding (000's)||75,467||35,645||75,467||35,645|
|Weighted average shares outstanding(2) (000's)||56,923||24,720||48,770||10,501|
|(1)||The term funds flow from operations should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. Funds flow from operating activities is a non-IFRS measure that represents loss and comprehensive loss before non-cash items such as depletion, depreciation and amortization, accretion expense, share based compensation, issuances of shares for services and deferred tax. Per share amounts are calculated using weighted average shares outstanding consistent with the calculation of loss per share. Other industry benchmarks and terms such as net debt and operating netback are not recognized measures under IFRS. Management believes these are useful supplemental measures of, firstly, the total amount of current and long term debt the Company has, and secondly, the amount of revenues received after the royalties and operating costs. Net debt, which terms represent current assets less current liabilities is used to assess efficiency, liquidity and the general financial strength of the Company. Readers are cautioned, however, that these measures should not be construed as an alternative to other terms such as current debt or net earnings in accordance with IFRS as measures of performance. The Company's method of calculating these measures may differ from other companies, and accordingly, may not be comparable to measures used by other companies.|
|(2)||The conversion factor of 7.089 on the reverse takeover of Royal Acquisition Corp. has been retroactively applied to the prior year comparative calculations of weighted average shares outstanding.|
2012 Guidance2 and Outlook
|Capital Expenditures $MM (incl. $1.8 MM for land and seismic)||$14.0|
|Drilling Program Gross (Net) Wells||20 (11)|
|Exit Production Boe/d||675-725|
|Funds Flow $MM||$6.4|
|- Per share||$0.09|
|Annualized Q4 2012 Funds Flow $MM||$10.0|
|- Per share||$0.13|
|Year End Net Debt $MM||$11.0|
We look forward to 2012 being another exciting year for Invicta as we continue to build on the technical successes at Kindersley. Through 2011 the Invicta team has taken the Company from a grass roots startup and transitioned it to a position of stable cash flow and a foundation for continued growth.
About the Company
Invicta is a Calgary based, emerging junior oil and gas company exploring and developing light oil opportunities in Saskatchewan and Alberta. The Company's current focus is the development of its Viking resource play in Kindersley, Saskatchewan.
This press release contains certain forward looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Invicta. Undue reliance should not be placed on these forward looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.
In the interest of providing Invicta shareholders and potential investors with information regarding the Company, including management's assessment of Invicta's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Invicta believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward looking statements pertaining to the following:
- the performance characteristics of the Company's oil and natural gas properties;
- oil and natural gas production levels;
- capital expenditure programs;
- the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;
- projections of commodity prices and costs;
- supply and demand for oil and natural gas;
- expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
- treatment under governmental regulatory regimes.
The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.
The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
- volatility in market prices for oil and natural gas;
- liabilities inherent in oil and natural gas operations;
- uncertainties associated with estimating oil and natural gas reserves;
- competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
- incorrect assessments of the value of acquisitions and exploration and development programs;
- geological, technical, drilling and processing problems;
- fluctuations in foreign exchange or interest rates and stock market volatility;
- failure to realize the anticipated benefits of acquisitions;
- general business and market conditions; and
- changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.
These factors should not be construed as exhaustive. Unless required by law, Invicta does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 Calculations based on 2011 capital expenditures of $11.2 MM, $31.2 MM change in 2P future development costs, and forecasted 2012 operating netback of $52.65/boe.
2 Based on the following assumptions: US $95/bbl WTI oil price and $1.00:$0.98US exchange rate. A $1 change in oil price or a $0.01 change in exchange rate has an estimated $100,000 impact on the forecasted funds flow.
For further information:
President & CEO
(403) 265-8890 ext 1
Vice President, Finance & CFO
(403) 265-8890 ext 4